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April 10, 2019

Bipartisan law would extend US EV tax credit

Potential electric vehicle owners in the US may be about to get a break.

By Olly Wehring

Potential electric vehicle owners in the US may be about to get a break.

According to a Reuters report, a bipartisan group of US is introducing legislation on Wednesday (10 April) to expand the electric vehicle tax credit by 400,000 vehicles per manufacturer.

This would give General Motors and Tesla a boost before the existing credit comes to an end for them as they have sold a prescribed number of EVs.

The existing US$7,500 EV tax credit, which allows tax payers to deduct part of the cost of buying an electric car, phases out over 15 months once an automaker hits 200,000 cumulative EV sales. GM saw its tax credit cut to $3,750 on 1 April. Tesla’s tax credit fell to $3,750 on 1 January and will end entirely at the end of this year, Reuters said.

The bill dubbed the Driving America Forward Act would grant each automaker a $7,000 tax credit for an additional 400,000 vehicles on top of the existing 200,000 vehicles eligible for $7,500 tax credits. It would shorten the phase-out schedule to nine months, the report said.

The bill would also extend the hydrogen fuel cell credit to the end of 2028. The bill is estimated to cost $11.4bn with all but $91m of that tally to extend the EV tax credit.

Last month, the White House proposed immediately eliminating the $7,500 tax credit, a move it said would save the US government $2.5bn over a decade, Reuters said.

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